Higher discounts on older models that are bloating
inventories, as well as on some newer models, are expected to
keep prices depressed and weigh on margins through the rest of
the year and possibly in 2017 as well.

Planemakers have little choice.

Billionaires in key markets like China, Brazil and Russia
have tightened their purse strings in response to weakening
economies. Oil tycoons have retrenched in the face of low oil
prices, while companies have slashed budgets.

"Business conditions in the executive jets industry have
proven to be more difficult than expected thus far in 2016, with
continued pressure on new jet sales coming from high levels of
pre-owned jet inventories and a highly competitive environment,"
Marco Pellegrini, CEO of Embraer Executive Jets, told Reuters.

Business jet deliveries are expected to drop 11 percent in
2016, according to Jefferies analyst Howard Rubel. That would be
the steepest percentage decline since 2009.

Prices are being further pressured with many aircraft owners
putting planes on sale, partly to avoid high maintenance costs -
typically $1 million-$4 million annually - adding to the glut in
the market. These jets have long shelf lives and planes that are
5-10 years old are considered as good as new.
Continued...